Armstrong 1: Documents by date

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FEDERICO C. SAYRE, Esq.

TOBY L. PLEVIN, Esq.

SAYRE, MORENO, PURCELL & BOUCHER
10866 Wilshire Boulevard
Fourth Floor

Los Angeles, California 90024
(213) 475-0505

Attorneys for BENT CORYDON

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES

) CASE NO. C 420 153

)

) AMENDED NOTICE OF MOTION AND
) AMENDED MOTION FOR AN ORDER
) DIRECTING THE PARTIES TO FILE
) AN EXECUTED DUPLICATE ORIGINAL

) OF THE MUTUAL RELEASE AND

) SETTLEMENT AGREEMENT

)

) Date: February 21, 1989
) Time: 9:00 a.m.

) Dept: 56

(FILED UNDER SEAL)

TO ALL PARTIES AND COUNSEL OF RECORD:

PLEASE TAKE NOTICE THAT on February 21, 1989, at 9:00 a.m. in
Department 56 of the above-entitled Court at 111 No. Hill Street,
Los Angeles, California, BENT CORYDON will move the Court for an
order that the parties file a duplicate executed original of the
Mutual Release and Settlement Agreement in the within case.

CHURCH OF SCIENTOLOGY OF
CALIFORNIA,

Plaintiff,

vs.

GERALD ARMSTRONG,

Defendant.

MOTN\ORD01822.TP1

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_

Said Motion is identical in all substantive respects to the
Motion captioned Motion for an Order Directing Plaintiff
Intervenor to File An Executed Duplicate original of the Mutual
Release and Settlement Agreement which has been amended only to
ask the court that such order be directed to all the parties
(Plaintiff, Intervenor and Defendant) rather than only to
Plaintiff and Intervenor.

Said motion will be based upon this notice, the points and
authorities, exhibits and declarations submitted herewith, and the
complete file of this matter.

DATED: January 26, 1989 SAYRE, MORENO, PURCELL & BOUCHER

FEDERICO C. SAYRE
TOBY L. PLEVIN
Attorneys for BENT CORYDON

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INTRODUCTION

As part of the Order dismissing this lawsuit, Judge Paul
Breckenridge ordered that an executed duplicate original of the
parties' "Mutual Release of All Claims and Settlement Agreement"
("Agreement") be filed with the Court. Since the parties have not
done so, they should now be ordered to do so. However, because of
the nature of that Agreement, it should not be filed under seal.

To do so would shield unconscionable conduct by the CHURCH OF
SCIENTOLOGY and its attempt to utilize court processes for the
purpose of obstructing justice.

I.

THE COURT ORDERED THAT THE MUTUAL RELEASE OF

ALL CLAIMS AND SETTLEMENT AGREEMENT BE FILED.

HOWEVER. THE PARTIES DID NOT OBEY THIS ORDER .

On December 11, 1986, Judge Paul Breckenridge received
numerous stipulations and proposed orders from counsel regarding a
settlement of the action. One of those documents was captioned
"Joint Stipulation of Dismissal." It stated:

"On December 6, 1986, the parties entered into
a 'Mutual Release of All Claims and Settlement
Agreement.' An executed copy of same
Agreement has been filed herein under seal and

shall be kept under seal by the Clerk of this
Court. This Court shall retain jurisdiction,
and may reopen this case at any time for the

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purpose of enforcing said Agreement."

(Emphasis added.)

A copy of that Stipulation is attached hereto as Exhibit A.

During the oral proceedings related to the settlement,
although the Court questioned counsel about the several
stipulations presented, including the Stipulation for Return of
Sealed Materials, there was no reference to the terms of the
Mutual Release of All Claims and Settlement Agreement (the
Settlement). See Exhibit B, Transcript of Proceedings,

December 11, 1986. The Order Dismissing Action with Prejudice
states that the Settlement was to be maintained under seal by the
Court. See Exhibit C. The Minute Order of the same date lists
the various stipulations and orders filed on December 11, 1986.
The Mutual Release of All Claims and Settlement Agreement was not
listed. See Exhibit D, Minute Order of December 11, 1986.

On December 12, the Court entered an order, attached hereto
as Exhibit E, observing that

"The Court finds that the document entitled
' Mutual Release of All Claims and Settlement

Agreement ' referred to in the Joint
Stipulation of Dismissal as and [sic] executed
copy and referred to in the Order Dismissing
Action as an executed duplicate original, has
not been filed with the court.'" (Emphasis
added.)

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[This raises the question of whether, when he signed the

Order Dismissing Action with Prejudice, Judge Breckenridge
actually reviewed that document or, rather, relied on counsel's
representations, as a matter of routine, that there was an
agreement. The reason for questioning whether Judge Breckenridge
actually reviewed that agreement will become apparent, infra .1

On December 17, 1986, the court prepared a minute order
noting a second conversation with counsel regarding the fact that
the "Mutual Release of All Claims and Settlement Agreement" had
still not been filed but that, "in view of the oral agreement of
counsel, the 'Order for Return of Exhibits and Sealed Documents'
is to be complied with". See Exhibit "F", Minute Order of
December 17, 1986. A review of the Register of Actions in this
case shows no filing of any Mutual Release and Settlement
Agreement on any date subsequent to December 11, 1986. See
Certified Copy of Register of Actions attached hereto as
Exhibit "G".

On or about December 23, 1988, a Response to Petition for
Writ of Supersedeas was filed with the Court of Appeal in support
of this Court's orders of November 9 and 30, 1988 in this matter.
Included among the exhibits thereto was (1) a redacted copy of a
"Mutual Release Agreement", with an appendix, between the CHURCH
OF SCIENTOLOGY and a person whose name was deleted which was
executed on December 5, 1986, on behalf of the Church; (2) a
document captioned "Settlement Agreement" which identifies
settlement amounts for a number of individuals in litigation

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against the CHURCH OF SCIENTOLOGY, including Gerald Armstrong and
an individual named William Franks. It includes Mr. Armstrong as
one of twelve clients participating in a collective settlement
with the Church concluded on December 11, 1986. It contains Mr.
Armstrong's signature and shows a settlement in the amount of
$800,000 for Mr. Armstrong and $40,000 for Mr. Frank (whereas the
Mutual Release Agreement mentions no money consideration but
merely purports to effect settlement for silence and a mutual
release of claims). All those documents are attached hereto as
Exhibit "H".

On or about December 31, 1988, Mr. Armstrong's attorney, Mr.
Michael Flynn, filed a document with the Court of Appeal
denominated a Response of Gerald Armstrong. Although hedging as
to whether the items comprising Exhibit "H" are what they purport
to be, he nevertheless asked the Court that they be "immediately
sealed as they are confidential settlement documents not intended
to be made public". See Exhibit "I", Response of Gerald Armstrong
to Opposition Filed by Real Party Interest. Attached as an
Exhibit thereto is a declaration of William Franks which appears
to be an admission that those documents were copies of his Mutual
Release with the Church and a Settlement Agreement with Mr. Flynn.
While these statements are tantamount to an admission that the
Mutual Release and the Settlement Agreement are precisely what
they purport to be, (that is, the release signed by each of Mr.
Flynn's clients including Mr. Armstrong, pursuant to the
collective settlement with the Church as reflected in the
Settlement Agreement), Mr. Flynn also acknowledged that, contrary

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to Judge Breckenridge's order, they were never filed with the
Court .

On January 4, 1989, the Court of Appeal denied Mr. Flynn's
request that the documents be sealed since they were "not part of
the case file in the underlying action." The Court further
stated, "The request is denied for failure to demonstrate
entitlement." See Order, attached hereto as Exhibit "J".

Pursuant to the Declaration of Toby L. Plevin, attached
hereto, counsel has diligently searched the court files containing
documents from all of the 1986 to the present. No Mutual Release
of All Claims and Settlement Agreement was found.

Based on the foregoing, it cannot be reasonably disputed that
the Mutual Release of All Claims and Settlement Agreement was not
filed as stipulated and ordered. Indeed, given the content of the
Mutual Release Agreement as set forth in section II, infra, and in
light of the misrepresentations to the court that it had been
filed prior to the December 11, 1986 hearing regarding the
Settlement, that failure must be deemed a deliberate effort to
prevent the court from knowing the unconscionable, unenforceable
terms it contains.

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II

BECAUSE THE MUTUAL RELEASE AGREEMENT CONTAINS

TERMS THAT ARE VIOLATIVE OF !

PUBLIC POLICY

AND

OBSTRUCT JUSTICE.

THE

MUTUAL

RELEASE

MUST

BE

ORDERED FILED BUT

NOT

SEALED

SO THAT

REMEDIAL

ACTION CAN BE TAKEN.

A. The Settlement Agreement Contains Terms
Which Violate Public Policy And Are An

Obstruction Of Justice.

The thrust of the Mutual Release is that the party adverse to
the CHURCH OF SCIENTOLOGY agrees, under penalty of a $50,000
liquidated damages claim, to refuse to talk to anyone about
anything about SCIENTOLOGY unless compelled to by lawful subpoena
but also requires that the party evade service of process of any
such subpoena. See paragraphs 6G, 6H and 8 of the Mutual Release.
It is self evident that such purchased silence has obstructed all
other litigants adverse to SCIENTOLOGY, including Mr. Corydon. No
doubt this impact will continue until the numerous people who feel
burdened by that part of the agreement are released from that
burden. (See Declaration of Bent Corydon attached hereto.)

In sum, the agreement is a violation of public policy and
must be brought to light to be countered because of its continuing
impact as an obstruction of justice. California case law requires
this result.

/ / /

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On point is Mary R. v. B & R Corporation (1983) 196 Cal.Rptr.
781, 149 Cal.App.3d 308, where a physician, accused of molesting a
minor, settled with a stipulation that the minor would not discuss
the events giving rise to the lawsuit. This settlement became an
order of the court, and when the Attorney General's office moved
to set it aside, the motion was denied. On appeal, the agreement
was held to be against public policy, wrongfully placing a party
under fear, and thereby prohibiting the Board of Medical Quality
Assurance (BMQA) from discovering facts. Mary R. approved Bianco
v. Superior Court . 265 Cal.App.2d 126 statement that "[a] law
established for public reason cannot be waived or circumvented by
a private act or agreement .” The court in Mary R. further stated
the agreement was a "ploy obviously designed by the physician to
aid him to avoid the professional regulation. . . " and an
"agreement to conceal judicial proceedings and obstruct justice."

While in Mary R. the BMQA had a statutory obligation to
regulate the practice of medicine and must investigate misconduct,
in civil lawsuits, brought under the color of law, a litigant has
the right to "investigate" charges made against him and to
discover facts in his favor by interviewing witnesses. For an
adverse litigant to pay a witness not to cooperate is clearly an
obstruction of justice.

In Tappan v. Albany Brewing Company . 80 Cal. 570, the court
invalidated a settlement agreement, stating:

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"It was contended by the Respondent that this
was nothing more than a payment of a sum of
money by way of a compromise of litigation,
and that such contracts have been upheld. We
do not so construe the agreement. It was a
promise to pay a consideration for the
concealment of a fact from the court and the

parties material to the rights of said

parties . and which it was her duty to make
known. Such a contract was against public
policy . . . ". (Emphasis added.)

In Maryland C. Co. v. Fidelity & Cas. Co. of N.Y. , 71
Cal.App. 492, the court noted the duty to refuse to enforce an
illegal contract or one against public policy. The court approved
language of Eggleston v. Pantages . 103 Wash. 458:

"After the papers had been served a contract
was made between the parties whereby, in
consideration to make a promise to pay a
certain sum of money the Plaintiff agreed to
withhold the complaint from the files and give
no information to anyone concerning the same
for the commencement of the suit, thereby
preventing those interested from knowing the
true state of facts. Here was a clear attempt
to conceal judicial proceedings and to
obstruct justice for the purpose of wronging

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others interested. Agreements of this
character are clearly against public policy."

In addition to preventing access to important information via
buying the silence of witnesses, not only does the Church seek to
keep this file sealed because of the purported privacy interests,
but they have made it a practice to refuse to settle cases unless

agreements are entered into sealing Court files . See Reporter's
Transcript of Proceedings, December 11, 1986, attached hereto as
Exhibit "B", p. 6, lines 25-28 where counsel for the Church
stated:

"That is the procedure that the Church has
insisted on and all courts have agreed to in
various other Scientology cases involving
Mr.Flynn and others which have settled:"

Accordingly, the purported privacy interest in this Court
file is laid bare as a pretext, and furthermore, other adverse
parties, such as Mr. Corydon herein have had to suffer needless
litigation regarding issues which have already been litigated.

For example, collateral estoppel bars Plaintiffs from denying that
(1) Scientology has pursued an active fair game policy against its
enemies, or (2) that it routinely violates the priest-penitent
confidentiality of records of "troublemakers". (See Memorandum of
Intended Decision, attached hereto as Exhibit "J", at p.7, line 26
through p.8, lines 25.)

/ / /

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In fact, such agreements are not merely a violation of public

policy, they may be considered criminal violations in light of
Penal Code § 138. Penal Code § 138 makes it a felony to offer any
form of bribe with understanding that person shall not attend a
trial or other judicial proceedings. Since the persons with whom
these agreements were made are prospective witnesses who are
prohibited from being "amenable to subpoena", they violate § 138.
Furthermore, when individuals are beyond subpoena power, a
contract to not cooperate with an adverse litigant must be
considered a violation of that provision as well.

Alternatively, to the extent that a party to these agreements
is only a potential witness to whom the statute may not apply per
se . nevertheless, the statute establishes beyond a doubt that such
potential interference with witnesses is an obstruction of justice
in violation of public policy.

B. The Fact That The Contracts To Keep Quiet
Were Part Of Settlement Agreements Is Not

Material.

The Church is certain to complain, in opposition, both that
filing the Agreement and/or filing it without a sealing order
would be tantamount to voiding contractual provisions which were
part of the consideration for which they settled. This argument
is invalid for three reasons: (1) two parties cannot create a
contract which will deny protection of the law to a third party;
(2) the courts cannot enforce a provision against public policy

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simply because failure to enforce it would leave one or more of
the parties' unjustly enriched, (3) the court cannot be bound by
the parties contract, especially an illegal contract.

Furthermore, since it was falsely represented to the Court that
the Mutual Release of All Claims and Settlement Agreement had been
filed with the Court, they cannot now be heard to complain that to
do so would endanger anyone's interests.

Clearly, it is an obstruction of justice to pay off witnesses
not to cooperate voluntarily with adverse parties. That the
payment came under a "settlement" does not change the effect or
the intent. It is still the purchase of a witness's silence.

This issue was addressed in Fong v. Miller . 105 Cal.App.2d 411,

233 P.2d 606 (1951) wherein the court stated:

"Appellants bitterly complain that the court's
action leaves the Respondent unjustly
enriched. The complaint is a familiar one, it
is generally made by those who, deeming
themselves wronged by their companions in
illegal ventures, find themselves denied of
any right to enforce their unlawful
agreements. Their pleas have always been
unavailing. This rule is not generally
applied to secure justice between parties who
have made an illegal contract, but from regard
for a higher interest - that of the public,

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whose welfare demand that certain transactions
be discouraged.” Id. at 414-415.

We assume the Church will further claim there is no
obstruction because individuals (at least those who do not avoid
valid process) can be deposed. However, Mr. CORYDON cannot get
the same assistance by deposition that he can by cooperation
especially when that person fears a lawsuit for $50,000 liquidated
damages! Furthermore, depositions have certain rules and limited
time, as well as considerable expense. Some of the parties to the
settlement agreement individuals reside outside of California and
their knowledge is quite extensive. Depositions cannot substitute
for voluntary cooperation, such as appearance at trial, nor should
such economic burden be placed on Mr. Corydon just to interview
witnesses. Further, he has the right, when possible, to prepare
his defense by private interviews of prospective witnesses, not
just paid-for depositions that have his adversaries present.
Finally, the party who does not avoid valid process is subject to
the threat of a $50,000 liquidated damage claim!

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C. Because Of Its Unclean Hands. The Church

Is Not Entitled To The Protection That

Sealing The Release Would Afford Them.

The Inherent Powers Of The Court Permit

It To Order The Filina Without Such

Protection.

The Church is sure to protest that if ordered to file the
Mutual Release and Settlement Agreement that it must be filed
under seal pursuant to Judge Breckenridge 1 s order. Their argument
will be that the Agreement is confidential and that it is
important to protect privacy interests pending the determination
of their writ and/or appeal. However, as parties with unclean
hands they must be denied such protection.

In Stone v. Bach (1978) 80 Cal.App.3d 442, 145 Cal.Rptr. 599,
the court stated:

". . . it would be a flagrant abuse of the
principles of equity and of the administration
of justice to consider the demands of a party
who becomes a voluntary actor before a court
and seeks its aid while he stands in contempt
of its legal orders and processes."

80 Cal.App.3d at 444.

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Further, the Stone court specifically noted that it was
contemptuous to avoid process while seeking judicial
consideration. Id. at 601. Here the Church has compelled the
agreement of others to avoid process as the price of their peace.

The case of Hull v. Superior Court of Los Angeles (1960) 54
Cal.2d 139, 5 Cal.Rptr. 1, is also pertinent. In that case the
California Supreme Court stated, "A court should have the right to
deny its process and aid to one who stands in contempt or is in
contempt of its orders. One who has willfully refused to comply
with the mandate of a court cannot then compel that court to do
its bidding." Id. at 5.

Finally, an order to file the Mutual Release and Settlement
Agreement but not seal it would, under the circumstances herein,
be well the inherent powers of this court. C.C.P. § 128.

C.C.P. § 128 states that every court shall have the power to
control the conduct of persons connected with judicial proceedings
and every matter pertaining thereto. In Rosato v. Superior Court
of Fresno County . 124 Cal.Rptr. 427, 51 Cal.App.3d 206, the court
noted C.C.P. § 128 "neither created nor circumscribed the powers
thus defined", but is a statutory confirmation of the court's
power which has been explicated and amplified by court decision.
The courts have the power to insure the orderly administration of
justice.

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As stated in People v. Smith . 91 Cal.Rptr. 786, 13 Cal.App.3d
897, the courts have inherent power to control judicial
proceedings and to see to it that all persons, including parties,
indulge in no act or conduct calculated to obstruct administration
of justice. See also Cooper v. Superior Court in and for Los
Angeles County . 10 Cal.Rptr. 842, 55 Cal.2d 291.

In Venice Canals Resident Homeowners v. Superior Court . 140
Cal.Rptr. 361, 72 Cal.App.3d 675, petitioners brought an action
under C.C.P. § 1084.5 to review granting of building permits. As
a condition of a stay order, the court ordered a bond to be
posted. The petitioners appealed asserting the code section did
not require bond or undertaking. The appellate court acknowledged
the same but stated the authority existed under the inherent power
of the trial court to exercise reasonable control over litigation
and the power to achieve justice, stating:

"The inherent power of all courts to control
and prevent abuses in the use of their
process. . . does not depend upon
constitutional or legislative grant but is
inherently necessary to the orderly and
efficient exercise of jurisdiction."

72 Cal.App.3d at 680.

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CONCLUSION

Given the foregoing, the following conclusions are necessary:

(1) The parties did not file an executed duplicate original
of the Mutual Release of All Claims and Settlement
Agreement as ordered;

(2) Defendant/Cross-Complainant Gerald Armstrong did not
file the documents because the very terms of his
agreement prevented him from disclosing its terms;

(3) The parties should be ordered to file the document
entitled Mutual Release of All Claims and Settlement
Agreement forthwith; and

(4) The document(s) thus filed should not be sealed.

BENT CORYDON urges the Court to make such findings and issue
such orders in the interest of justice.

DATED

1989

PAUL MORANTZ
P.O. Box 511
Pacific Palisades, CA

/ TOBY L. PLEVIN
Attorneys for Plaintiffs

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DECLARATION OF TOBY L. PLEVIN

I, Toby L. Plevin, declare as follows:

1. I am an attorney at law, duly licensed to practice in

all courts of the State of California and am an associate with the
law firm of Sayre, Moreno, Purcell & Boucher. I have been
assigned to represented Bent Corydon in the above captioned
matter.

2. I have conducted a diligent search of the within file in
all volumes with material from the year 1986 to the present. No
Mutual Release and Settlement Agreement is in the file.

3. The Register of Actions does not indicate that any such
document has been filed.

I declare under penalty of^perjury that the foregoing is true

and correct.

1989, in Los

Angeles, California.

Declarant

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DECLARATION OF BENT CORYDON

I, BENT CORYDON, declare as follows:

1. To my information and belief, the Mutual Release
Agreement, attached as part of Exhibit H to the motion, are true
and correct copies of the releases that various individuals
adverse to Scientology had to accept in order to settle with the
Church.

2. Prior to the execution of the same, I spoke freely
concerning Scientology with Bill Franks, Nancy Dincalci, Kima
Douglas, Laurel Sullivan, Edward Walters, Howard Schomer, Martin
Samuels and Gerald Armstrong.

3. Each of these individuals provided me with information
that led to my forming opinions concerning the Plaintiffs stated
in the media broadcasts over which I have been sued for
defamation. Further, these individuals have advised me concerning
illegal and harassing tactics of the Church of Scientology.

4. Since the people identified above settled with the
Church, they have not been available to confer with me to prepare
affidavits for me or to testify regarding pertinent events. All
of those people, except Laurel Sullivan have expressly told me
that they can not even talk with me or my attorneys about
Scientology. They each have potential value as witnesses in my

MOTN\ORD01822.TP1 “20“

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lawsuits with the church. Laurel Sullivan has conveyed through
others that she will not talk to me at all.

I declare under penalty of perjury that the foregoing is true
and correct. Executed this 5L6 &day of January, 1989, in Los
Angeles, California.

MOTN\ORD01822.TP1

-21-

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BRUCE BUNCH
CONTOS & BUNCH

5855 Topanga Canyon Boulevard
Suite 400

Woodland Hills, CA 91367
(818) 716-9400

Attorneys for Cross-Cor.plainant
Gerald Armstrong

JOHN G. PETERSON
PETERSON AND BRYNAN
8530 W^lshire Boulevard
Suite 407

Beverly Hills, CA 90211
(213) 659-9965

Attorneys for Plaintiff and
Cross-Defendant CHURCH OF
SCIENTOLOGY OF CALIFORNIA

FILED

DEC111986

* S. Z0LIN CoUtfT
ROSIE M. HART. DEPUBT

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES

GERALD ARMSTRONG,

Cross-Complainant,

v.

CHURCH OF SCIENTOLOGY OF
CALIFORNIA, a California
Corporation,

Cross-Defendant.

No. C 420 153
(Severed Action)

JOINT STIPULATION
OF DISMISSAL

In satisfaction of valuable and other consideration
tendered to the Cross-Complainant by the Cross-Defendant,
receipt of which is hereby acknowledged, the parties to the
above-entitled action, pursuant to California Code of Civil
Procedure S 581 hereby stipulate that said Cross-Complaint be
dismissed with prejudice.

- 1 -

EXHIBIT A 4

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ti

On IMUko , 1986, the parties entered
into a "Mutual Release of All Claims and Settlement Agreement.
An executed copy of same Agreement has been filed herein under
seal and shall be kept under seal by the Clerk of this Court.
This Court shall retain jurisdiction, and may reopen this case
at any time for the purpose of enforcing said Agreement.

JN- DATED

B RUCE BUNCH - OtlAtrO'Z&JlC,

:os & BUNCH

5fc£5 Topanga Canyon Boulevard
Suite 400

Woodland Hills, CA 91367
(818) 716-9400

G. PETERSON
CRSON & BRYNAN
8530 Wilshire Boulevard
Suite 407

Beverly Hills, California 90211
(213) 659-9965

*.

- 2 -

EXHIBIT A

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

(

FOR THE COUNT! OF LOS AN TELES

DEPARTMENT NO. 5T HON. FALL G. Er.ECXENRIDGE, JR. , JUDGE

GERALD ARMSTRONG,

\ Cress-Complainant,

vs.

CHURCH OF SCIENTOLOGY Of CALIFGF-NIA,
Crcr.s-Dafcndant.

No. C 420 153

KARY SUE HUBBARD,

Intervener.

REPORTER’S TRANSUR1 PT OF P.-CCZEDINGS

Thursday, December 11, 19C5

API-' Z A'LANCES:

For the Crosc-
Coroplainant:

For the Cross-
L'cicncant:

(Appearances
Continued Inside)

CONTOS L BUNCH
By; JULIA DRAG0JE7IC and
lUCHAZL FLYNN

5855 Topanga Canyon Boulevard
Suite 400

Woodland Hills, California 913677

i

PETERSON ft BRYNAN
By; JOHN G. PETERSON
8530 Kilshire Boulevard, Suite 407
Beverly Kills, California 90211

NANCY L. HARRIS, CSR No. 644

Official P.“corter

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p

APPEARANCES; (Continued)

For the Founding
Church of Scientology
and Intervener:

i

AiuO\Frc£f?nt;

MICHAEL LEI HERTZSERG
Pro Rac Vice
275 Madison Avenue
New York, New York 10016

LAWRENCE E. HELLER

«

EXHIBIT B *

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LOS ANGELES, CALIFORNIA; THURSDAY, DECEMBER 11 , 1986 ; 4:03 P.M.

- —oOr--

THE COUHT: All right. The? parties are here on Armstrong
»

versus Church of Scientology.

FlYN'". Ve are here.

After lengthy negotiations. Your Honor, hntween
my so If and Mr. Hortcberg on behrlf of the Church and
Mary Sue Hubbard, we are extremely hanny to report to the
court that the court will not have to try this case, this
counterclaim in March.

r~ \ %r •** ' s <; v ; ■■— ■> i— * •*,-.* • ’■* i3 *• _i .? ' * — *]*<■» ' ■ ‘ ~ —

faction of Mr. Armstrong and to myself and to Mr. Kertzberg*s
client.

THE COURT; How «abcut Miss Dragojevic?

MS. DRAGOJEVIC: I think I will go along with it.

MR. PETERSON; Maybe ve should identify ourselves for

the record.

THE COUP.T; Yes, probably a coed idea.

MR. . FLYNN; Michael Flynn for Gerald Armstrong. :

MS. DRAGOJEVIC: Julia Dragojevic for Gerald Armstrong.
MR. HELLER: Lawrence Heller, and I am here in case there

were any questions, I had a little input in the settlement.

MR. ?E7>:?2CN; John Petersen for the Church :f
Scientology of California.

MR. HERTtBERG: Michael Lee Hertzbarg for Mary Sue
Hubbard, who is the intervon.or in the underlying original cire
of the Church of Scientology against Gerald Armstrong.

"HIBST

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KR. FLYEN: Pursuant to the settlement. Your Honor, the

parties have entered into a stipulation which we will provide
the court to have the return of all documents to the Church
with the exception of cix documents which are currently Under

t

litigation in United States versus Scientology, the case that
the government is trying to cet six exhibits on, and the order
that we provided to the court contemplates the exemption of
those cix. exhibits.

We have also entered into a stipulation with
regard to the sealing of the court records, and I believe
Kr. Hertrberg has copies.

MR. PE7ERSCN: I have the original cf the stipulations
and tne order. I would present it to the clerk for filing
and she could give it to the court. Might want to follow
along.

THE COURT: I have read the proposed stipulation and
order that have been submitted. And the question arises in my
mind, what about the — does this dismissal have anything at
all to do with the underlying case that'is presently on
appeal?

KR. FLYNN: It doesn't, Your Honor.

Certain issues in that case are going to remain
on appeal pursuant to the stipulation of the parties.

THE COURT: Well, won't those exhibits have to remain
with the court? As that matter is still on appeal?

KR. HERTZBERG: Your Honor —

THE COURT: I don't mean the ones that are just sitting
down in the clerk's office, but I mean the ones that have h oar

EXHIBIT B

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marked and received either as an exhibit for identification or
received in evidence in the case.

MR. HER7Z5ERG: I don't believe they all do, Your

Honor.

i

I think that the court of appeal has chosen
certain exhibits, a discrete number of them which they have
before them and they have made that choice, so I don't think —
certainly as Your Honor has recognized, none of the other
documents would be affected, and I don’t know how many
documents ve are talking about that may be before the court
of appeal —

THE COURT: Well, I mean, there is a problem. I don't
know what the court of appeal is going to do.

Let's assume they reverse it and send it back fer
a new trial. I assume these exhibits will stijLl have to be
used if the case is going to be retried on the underlying
complaint.

MR. FLYNN: Pursuant to the issues that are remaining,

Your Honor, I think that the parties' overall stipulation is
such that we will not need those exhibits on any retrial if,
in fact, there is a retrial. #

I think Mr. Armstrong is satisfied, and I know
I am satisfied, that ve won't need them.

MR. HERTZBERG: Your Honor, that was a decision that is I
part of the agreement that was made, a very important part of
it, may I add an indispensable part of it. And after
Mr. Armstrong consulted with counsel, this is part of what ve
bargained fcr.

i

EXHIBIT 0

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4

So they are willing to proceed on that basis, ar.d
I don't think that the court should get involved, frankly.

THE COURT: Kell, I am just trying to raise an issue
here. I don't want six months downstream or a year somebody
to start screaming, 'Whore are these exhibits? We need to
retr^rvthis case."

If the court cf appeal does one thing, they
affirm, there may be a petition for hearing with the
California Supreme Court or with the.United States Supreme
Court..

MR. HZR7Z3ERG: Your Honor, ve contemplated all that.

That is why these negotiations vsre so arduous
and time consuming, and we have arrived today, all those
possibilities were discussed between our side and Mr. Flynn,
and each side knows what they are bargaining for here. And ,
Mr. Armstrong has signed a stipulation for return of sealed
materials and exhibits which is before Your Honor.

The order tracks that. It has the additional
language in it that it exempts from the scope of the return
those documents that the federal court might be interested in,
and that is what the agreement was between the parties.

THE COURT: What exhibits does the court of appeal

have?

MR. FLYNN: I am not sure, Your Kcr.cr, but I supocse,
having argued the appellate case, I suppose there is a simple
answer, also, to Your Honor's question in light of the
stipulation. The appeals court could always simply request
whatever exhibits it wants from the appellant in that case, .

-- exhibit b

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«

5

THE COURT: In Los Angeles we call ‘it appellant.

HR. FLYNN: The appellant, whoever it is, then.

THE COURT: That is with the French, Bostonian or
something. •'

MR. HERTZ3ZRG: Your Honor, I ar. informed that the court
of appeal asked for 50 documents and they have them. So for
the moment, presumably those could not be returned by the
clerk of this court.

THE COURT: Kell, it is the parties' agreement, then,
but whatever they have got, the county clerk is no longer to
be custodian of those and they will be returned to the parties
by stipulation of the parties.

MR. KZR7Z3ZAG: That is what we stipulated to in
writing. That is an integral part of this settlement.

>1R. PETERSON: And when the 50 documents cone back —

TEZ COURT: If it is what the parties want to do, it is
okay with me.

t

HR. PETERSON: And when the 50 documents come back from
the court of appeal, they also will be turned over to the
Church.

THE COURT: I think that the court would require a
further joint order or stipulation.

In other words, I don't want to turn those over
if a remititur comes down, regardless of what it is, or acme
clerk turns them over without knowing whether or not they
might be further needed.

MR. HERTZ5ERG: We agree to that right now.

MR. FLYNN:

That vculc be agreeable.

EXHIBiT 8 5

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i _ 6 _;_

THZ COURT: Just by stipulation of the parties, it can
be released at that tine.

MR. HELLER: Your Honor, for what little I can give,
this insight was accurate.

This was an issue that was discussed at length
bf.tv<een the parties when negotiations were going cn.

>i?.. FLYNN: It is apparently contemplated in
paragraph 3 of the proposed order, Your Honor.

THE COURT: Well, this implies that immediately when
they are returned that they be immediately turned over to
the Church without any further —

MR. FLYNN*: That is agreeable.

MR. KZRT2EZRG: That is agreeable.

MR. FLY Nit: To Mr. Armstrong.

KR. HZRTZBERG: This is part of this rather complex
.process that vc have all agreed on. •

THE COURT: What is this — under this stipulated
sealing order paragraph 2 provides that the entire remaining
records of this case, save only this crcer, the order of
dismissal of the case, and then the order necessary to
effectuate this order and.the order of dismissal, are agreed
to be placed under seal of the court.

What is it that you have in mind, the file

itself?

MR. HERT25ZRG: Yes, Your Honor. That is the procedure
that the Church has insisted on and all courts have agreed to
in various other Scientology cases involving Mr. Flynn and
orhers which have been settled.

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7

MR. FLYhH: Wt settled. Your Honor, several cases in

the federal district court in Tampa, Florida and recently six

cases in the federal district court in Los Angeles.

THE COURT: I just vant to know what is contemplated so
*

the clerk won't be running around and —

nN MP.. FLYJCIC : I'd s?y the entire record, I r.iir. the

court file.

THE COURT: There was a reporter's transcript. There
w.s an original and copies prepared.

Of course, those vent to the court of appeal.
MR. FLYKK: Whatever is in the physical possession of

the court —

THE COURT: I guess we are talking just basically this
multiple set of files will be placed under some kind of seal.

MR. HERTZ-BERG: Your Honor, presumably any materials
that come from the court of appeal would then be integrated
under that seal.

THE COURT: Yes. That would be so understood:

Of course, there have been innumerable people in
the interim who have come forward and examined the file. I
haven't the slightest idea who all those people are, but
certainly we can't go back and retract from them whatever they
have seen or observed or copied.

KR. HERT2.BERG: We understand, Ycur Kcr.cr.

THE COURT: All right. Then, the court will sign the

respective orders.

Is that all?

III-.. F LYhll: Thank you, Your Honor.

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8

TEL COURT: I guess we should vacate the trial date.

Ar.y other notions?

KS. DRASOJEVIC: Mandatory settlement conference.

KR. I an sure Your Honor is very sorry to hear

all this.

THE COURT: We wish you all good luck in the future.

You are ill welcome to cone tack and try more
carer. Some other subject, perhaps.

Kk. FLY&C: Being from Boston, I'd like to personally
thar./: you for all your courtesies in the court.

THE COURT: Veil, we sin. to please.

KR. KZRT2LERG: I don't want tc be overly incutsitive,
but ;.tr. Your honor signed the order dismissing the case7

THE COURT: I signed whatever orders were submitted.
Includes a -'dismissal.

MR. PETERS 0h ? : Kr* vill verify with the clerk and get a
conformed copy.

TEE CLERK: Do you have originals of these?

MR. HILLER: I think those ar«- all* originals.

THE CLERK: Originals, but they are copies of documents.

MR. FETEF-SOH: I think the problem, sorr.e of them were
signed ir. counterpart.

MR. HELL*:?.: Vie.tried to g*t all signatures on one
because one c£ then has five or si:c signatures. ’ .

THE CL'Jr. 7: Why don't you look over what is there?

MR. PETERSON: I think we car. work it out with the clerk/
any problems with original versus copy, and take care of it.

(At 4:17 p. = . the proceedings were adjourned.) Q

EXHIBIT B _„l

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9

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY Or LOS ANGELES

DEPARTMENT NO. 57 HCN. PAUL G. LRECXENRIDGE, JR. , JUDGE

GERALD ARMSTRONG,

^ Cross-Conrplainant,

vo.

CHURCH Of SCIENTOLOGY Of
CALIFORNIA,

Cross-Defendant.

No. C 423 153
REPORTER'S CERTIFICATE

STATE OF CALIFORNIA )

) £5

COUNTY OF LOS ANGELES )

I, NANCY L. HARRIS, Official Reporter of the
Superior .Court of the; state of California, for the County of

Leo Angeles, 3o hereby certify that the foregoing pages,

• .

1 to 6, inclusive, comprise a true and correct transcript

of the proceedings held in the above-entitled matter on

Dctt-i* *J>er 13, ISFfi.

Dated this l£th day of December, 1D25.

, CSR No. 644

• Official Reporter

-

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SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES

GERALD ARMSTRONG,

Cross-Complainant,

v. ^

CHURCH OF SCIENTOLOGY OF
CALIFORNIA, a California
Corporation,

Cross-Defendant.

No. C 420 153
(Severed Action)

ORDER DISMISSING ACTION
WITH PREJUDICE

original filed;

DEc U198S

c 0UNTY. CLERK

- -Upon consideration-of the parties*-Stipulation for •

Dismissal, the "Mutual release of All Claims and Settlement
Agreement" and the entire record herein, it is '

ORDERED AND ADJUDGED: . •

1. That this action is dismissed with prejudice.

2. That an executed duplicate original of the
parties* "Mutual Release of All Claims and Settlement Agreement"
filed herein under seal shall he retained by the Clerk of this
Court under seal.

jt /■

Dated: December

//

1986

yf / *Bms

Hon. Paul G. BrecXenridge

EXHIBIT C

DEPT. 57

Dare DEC . 11,1986 SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES

HONORABigp G BRECRENRIDGE, JR JUDGE

Deputy Sheriff

2o S YAKOUBIAN Court Attendant

H HART , Deputy Clerk

N HARRTS , Reporter

(Parties and counsel checked if present)

C420153

GERALD ARMSTRONG,

Counsel for CONTOS & BUNCH
x. Plaintiff BY.- JULIA DRAGOJEVIC
MICHAEL FLYNN

YS

CHURCH OF SCIENTOLOGY OF
CALIFORNIA,

Counsel for

T PETESSCR Z BEYNAN-7-

A- Detendanr JOHN G. PETERS0N 1/

MICHAEL HERTZBERGj/for M.Hubbard

also appearing,LENSEE,LENSEE 8c/
bl :LAWRENCE E. HELLER

MATURE OF PROCEEDINGS: JOINT EX-PARTE APPLICATION FOR DISMISSAL

Pursuant to stipulation of the parties, the cross-complaint is
dismissed with prejudice*

Further orders are made pursuant to stipulation, including the-
following: The Court retains jurisdiction to enforce the
settlement agreement; all documents surrendered to the court; r
or marked as exhibits shall be returned to the Church of Scientology
or its attorneys forthwith except six, 500-CCCCC* 500-KKKKK,

500-LLLLL, 500-00000 , 500-PPPFP and 500-000000; the entire remaining
record of this case, except the "Stipulated Sealing Order" and
"Order Dismissing Action Vith Prejudice" filed this date, are
ORDERED SEALED and not to be opened or inspected without prior
order of Court.

The following listed documents are filed this date: Joint Stipulation
of Dismissal, Order Dismissing Action With Prejudice, Stipulation
for Return of Sealed Materials and Exhibits, Order for Return of
Exhibits and Sealed Documents, and Stipulated Sealing Order.

EXHIBIT D i

(2) DEPT 57

MINUTES ENTERED
12 - 11-86
COUNTY CLERK

7**441 *n*> am*, a an -» h*

mikii itc (^onco

DEFT. 57

Dar«J)EC . 12 ,1986

SUPERIOR COURT OF CAUFORNIA, COUNTY OF LOS ANGELES

HONORA8L5P G BHECKENRIDGE , JR JUDGE

Deputy Sheriff

NONE

Court Attendant

R TTAiyP < Deputy Clerk

NONE ' Reporter

(Parries and counsel checked if present'

C420153 Counsel for

GERALD ARMSTRONG, X—Plaintiff

VS Counsel for

X—• Defendant

CHURCH OP SCIENTOLOGY OP
CALIFORNIA,

NATURE OF PROCEEDINGS: ORDER

The Clerk having this date had conversations with counsel for
cross-defendant, John G. Peterson, the Court finds that the
document entitled "Mutual Release of All Claims and Settlement
Agreement” referred to in the Joint Stipulation of dismissal
as and executed copy and referred to in the Order Dismissing
Action as an executed duplicated original, has not been filed
with the court. .

Good cause appearing therefor, the Court orders that the County-
Clerk may maintain the remaining six (6) exhibits in the normal
and regular manner of handling sealed exhibits.

EXHIBIT E 4

minutes entered
12-12-56

COUNTY CLERK

,r.. jmh y /

Date DBG .17, 1986 SUPEMOi COU«T OF CALJFOiNIA, COUNTY OF LOS ANGELES

HONORABLE P.G. BRECXEURIDGE , JTflUDGE II R. HART , Deputy Clerk

— ■ ' . y . •- Deputy Sheriff NONE , Reporter

2." Court Attendant II (Parties and counsel checked if present)

C420153

GERALD ARMSTRONG \

VS

CHURCH OP SCIENTOLOGY OP
CALIFORNIA,

Counsel for
X- Plaintiff

Counsel for
X— Defendant

NATURE OF PROCEEDINGS:

COURT ORDER

AO

The Clerk^has had telephone conversations with counsel for
cross-complainant, Julia Dragojevic and counsel for cross¬
defendant, John Peterson on two (2) separate occasions.

Pursuant to oral agreement of both counsel that notwithstanding the^ , -
fact that the document entitled, "Mutual Release of All
and Settlement Agreement", has not been filed, the "Order:

Return of Exhibits and Sealed Documents" is to he complie^Bd.ti^'I^:t:-

Pursuant to Court order exhibits 500-CCCCC, 500-XKXKK,

500-00000 , 500-PPPPP and 500-000000 and their copies are -*V

remain sealed in the custody of the Superior Court Exxfaibitf .'•**?• •

Custodian, not to be opened without prior order of Court.

( 2 )

EXHlillF J

DEPT.

57

MINUTES ENTERED

12-17-86

COUNTY CLERK

7«M4M02(P»* M3»2«

MINUTE ORDER

SUPERIOR COURT LOS ANGELES COUNTY

C 420153

CASE NO.

SUPERIOR COURT LOS ANGELES COUNTY

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SUPERIOR COURT LOS ANGELES COUNTY

CASE NO

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PAGE

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YEAR MONTH OAY

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APS 16

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APR 16

Plffs, proposed court description of case to ,jury(shorter version)

Motion to disqualify Michael J. Flynn as counsel for deft. Gerald

Armstrong or for alternative order

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Trial motion of deft. G. Armstrong to disqualify Barrett S. Litt

-JJR

16 1984

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for adm pf genuiness of documents

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16 fijli

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/

16S84

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• /

evid and the test, of various w$ts ‘

A

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s

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matter of admissible evid. and the test, of various wits.

s

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16 1*84

Cddos of deft, to mot in limine re adm of and test, relating to

documents sealed by this Court

/

APR

61984

Deft, response to amend not in limine limiting the sub.i matter of

admissible evid. and the test, of various wits.

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161984

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•APR 1

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APf

16&a

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a

support of an anticipated directed verdict motion

K

APR

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AP

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APR

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Exhibits to trial bfief of deft.. Gerald Armstrong

APf

16

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. APf

16S84

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A

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16 WU

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16

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16$4

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